ENGLISH

Monetary and Fiscal Dynamics

By Professor Dr. Michael Carlberg (auth.)

Book information

Publisher
Physica-Verlag Heidelberg
Year
1992
ISBN
978-3-7908-0619-9, 978-3-642-47689-1
DOI
10.1007/978-3-642-47689-1
Language
english
Format
PDF
Filesize
4 MB (4105733 bytes)
Series
Studies in Contemporary Economics
Edition
1
Pages
194\195
Time added
2013-12-12 02:00:00
Economics general

Description

The analysis will be conducted within an IS-LM model augmen- ted by the dynamics of money wages, private capital and public debt. A macroeconomic shock induces an extended process of adjustment that is characterized by unemployment. This in turn requires a dynamic path of monetary and fiscal policy: As a response to the shock, the central bank continuouslyadapts the quantity of money so as to keep up full employment all the time. And the government continuously accommodates its purchases of goods and services. Can this be sustained? Or will public debt tend to explode, thereby driving the stock of capial down to zero?

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